Industry Update - Kintetsu World Express (USA), Inc.

Page 2Other countries affected included Vietnam, where at least 55 have diedand there are about $60 million worth of damages. Cambodia was alsohit with the worst flooding the country has seen in over a decade; withmore than 245 deaths and an estimate of over 245,000 families losingtheir homes. Laos also felt the poundings from the rain with a deathtoll close to 30 and nearly 430,000 citizens affected by the flooding.KWE Thailand’s headquarter, warehouses and employees were alldeeply affected by this devastation. The Navanakorn Warehouseexperienced heavy flooding but is now back to normal operations. Themain office was swamped with 70cm of water but it is slowlyretreating.Despite this devastation, employees are working swiftly for a fastrecovery.photo credit: KWEThe revised version of the United States and South Korea’sFree Trade Agreement (KORUS FTA) was passed by the Senate(83-15) and the House (278-151) on Oct. 12, 2011. Accordingto the Office of the United States Trade Representative,“Nearly 95% of bilateral trade in consumer and industrialproducts will become duty free within five years of the dateFTA enters into force and most remaining tariffs would beeliminated within 10 years.”The U.S International Trade Commission estimates that thedecrease in tariffs will add $10 billion to $12 billion annually toU.S Gross Domestic Product (GDP) and an estimated $10billion annually to Korea’s merchandise export.photo credit: www.obama.netAir Cargo World stated that the free trade agreement with the European Union can increase trade in this market by $4.7billion annually until 2015 along with growing airfreight volume by 6.1%.Representatives from both Korean and Asiana Air agreed that Europe and North America are lagging behind their earliergrowth projections. In response to this, Korean Air added a group of second tier cargo markets in Qatar, St. Petersburg,Istanbul and Zaragoza to its freight network while Asiana spread to Miami and Portland.“This year’s business has decreased because of economic circumstances in the Eurozone and North America,” said KeeChul, Vice President of Cargo Sales at Asiana, “Korea’s exports and imports are not as strong as last year because demandin the U.S and EU have been getting weaker.” Kee hopes that the move to Miami will give them the foot in the door forthe flow of goods between Asia and Latin America. Korean Air already runs freighters to Miami and is also looking toexpand in Latin America.

Page 3KWE Switzerland was given the opportunity to attendthe “Transport and Logistik Schweiz 2011” at Berne Expowith a booth slot in order to promote their services. Itwas a huge success and many of their customers came tovisit and support their efforts. A myriad of new businessrelationships were created as KWE Switzerlandnetworked to increase their presence in the Swissmarket.KWE Switzerland’s booth at the eventKWE Switzerland already booked a booth for next year’sTransportation Fair called “Fracht 2012” which will beheld in Winterthur, near Zurich Airport.For more details, go to:www.easyfairs.com/logistikschweizphoto credit: KWE SwitzerlandKWE wants to congratulate their Ireland office for acquiring their EU *AEO standards certification onSeptember 30, 2011. This certification, commonly referred to as AEO-F, ensures that KWE Ireland receivespreferential treatment in customs clearance procedures as well as security and safety controls.They are the third company within the KWE group to receive this after KWE Germany and KWE UK.KWE Ireland has acquired this certification as part of its efforts to provide the highest possible quality services tomeet their customer needs.*This certification allows freight forwarders that have met the required standards to receive preferential treatmentwhich simplifies and accelerates customs clearance procedures.KWE Canada has recently launched their Twitter campaign in order to keepcustomers up-to-date with information on current events.Since the release of their new website (www.kwe.ca), their marketingdepartment has really amped up and is emphasizing the importance ofcommunication with their customers via social networking and the internet.Follow KWE Canada at: www.twitter.com/kwecanada

Page 4KWE is pleased to announce that on September 16, 2011, ithas registered a new logistics and warehousing company inIndonesia!Since establishing PT. Kintetsu World Express Indonesia in2003, a company focusing on the handling of air and oceanfreight, KWE has continued to expand its operations withinthis country. In line with an ever increasing demand forlogistics services within Indonesia, KWE has established thisnew company focused on providing logistics andwarehousing services.Scheduled to commence fully fledgedoperations in April 2012, this newcompany, centering on Japanesemanufacturers who have expandedoperations into Indonesia, will provide acomprehensive range of cargodistribution services.The provided services will encompasseverything from international transportand the handling of customs clearanceprocedures to providing logisticsservices within Indonesia itself.Company Name:Shareholders:Representative:Main Business:Address:Phone:PT. Kintetsu Logistics IndonesiaKWE-Kintetsu World Express (S) Pte Ltd.(90%)PT. Kintetsu World Express Indonesia(10%)Shogo Ikeuchi (President)Logistics & Warehousingphoto credit: KWEKomplek Pergudangan Soewarna Unit A 6-7, TamanNiaga Soewarna Blok B Lot 1-5 Bandara InternationalSoekarno-Hatta, Cengkareng-Jakarta 19110, Indonesia+62-21-5591-3151 (office) +62-21-5591-1792 (fax)Asiana Airlines initiated a new cargo freighter service fromCheongju International Airport to Atlanta with four directflights per week. This new route will further expand andstrengthen Asiana’s global freighter program (Asiana isKorea’s second largest airline after Korean Air).The Organization for Economic Cooperation andDevelopment recently ranked the country’s dependenceon trade the highest among the world’s largest countries,with exports making up 43.4% of GDP.The flights will also contribute to the growth of Atlantaas an important airfreight hub. Atlanta has shownsignificant growth since 2009, with total airfreightincreasing 22% overall and 35% in international air cargo.photo credit: Chang Ho Lee

Page 5According to Air Cargo World, Singapore Airlines Cargo will starta weekly freighter service from its hustling and bustling ChangiAirport to Germany’s Frankfurt Airport starting November 2.Singapore Airlines’ officials hope these flights will be occupiedwith machinery and automotive merchandises since Frankfurt isa major hub for the manufacturing and air transportationsectors. The new route may also boost volumes for FrankfurtAirport who has recently experienced lower than average cargovolumes for the month of September since the total night flightban.Senior Vice President of Sales and Marketing at SingaporeAirlines, Tan Tiow Kor stated, “The freighter services to Frankfurtwill give our customers more choice of flights to choose fromand will play an important role in expanding two-way trade linkswith key markets in Asia and Europe.photo credit: wonderskiesThe new course will be achieved by Boeing 747-400 freightersand expand Singapore Airlines’ cargo capacity on its twice-dailypassenger services to Frankfurt (Air Cargo World).According to Air Cargo World, “Lufthansa Cargo’s freighterservices to the U.S and China are the most affected by theshocking decision on October 11 to ban night flights atFrankfurt Airport by the Hesse Administrative High Court inGermany .”Lufthansa had ten night-flights planned for its winterscheduling by the end of October. Karl Ulrich Garnadt,Lufthansa Cargo’s CEO ,stated in a press conference that apermanent ban can cost them in the double-digit millions ofeuros. One analyst measured that this action will costLufthansa somewhere between 30 million and 50 million euros.The biggest victim of the ban is the same day delivery service tothe U.S over New York and Chicago, while the cancellation ofthe twice weekly flight to Tianjin, China and re-routing of fiveweekly Beijing and Guangzhou services through Cologne arealso affected.Garnadt stated, “The ban came three weeks before the start ofthe winter season, so there was almost no time to react. It leftus a very short period to reschedule our entire program.”The final verdict on the ban of night flights will be reachedbetween January and February of 2012. The best thing thatLufthansa can hope for is for no change and to resume fullforce with their summer schedule and expansion plan toFrankfurt.photo credit: duponeregistryAs of now, with restrictions, the only German airports wherenight flights are permitted are Leipzig, Cologne andNuremberg. “Lufthansa is still set to take delivery of areplacement fleet of Boeing 777 freighters starting 2013, butwill have to consider a different home base if the curfewstays.”“Frankfurt is essential to the logistical network. We can, forthe most part, provide our customers with the required lift,but there are serious consequences of our reliability [from thenight ban]. It will be possible to operate, but we would have tore-analyze our future development.” Ganadt.

Page 6WESTBOUND (from USA to Asian destinations)Oct 01 through Dec 30, 201120’ dry 40’-45’ dry 20’ reefer other reeferBAF – West Coast 584 730 823 1029BAF – East Coast 1149 1436 1531 1914IFC – Pure truck 104 104 104 104IFC – Truck/Rail 359 359 359 359EASTBOUND (from Asian origins to USA)Oct 01 through Dec 30, 2011per 20’ per 40’ per 40HQ per 45’BAF – West Coast 430 538 605 681BAF – East Coast 847 1059 1191 1341IFC-Truck 104 104 104 104IFC-RIPI 180 180 180 180IFC-IPI 359 359 359 35925 Thanksgiving Day (U.S.A) All U.S. Offices Closed